KPMG Law Ukraine represented interests of business in a transfer pricing dispute
KPMG Law Ukraine represented interests of an industry leader in a tax dispute over compliance with an “arm's-length principal” in the controlled transactions.
As a result of a documentary unscheduled tax audit on transfer pricing issues, the tax authorities concluded that company was not in compliance with the tax legislation due to the fact that company’s prices were not in line with the regular prices and the “arm's-length principle”. Based on such conclusion, the tax authorities issued a few tax notice-decisions amounting to nearly UAH 1.5 billion.
To chalange the above tax notice-decisions, the company engaged lawyers from KPMG Law Ukraine who succeeded in defending the company's interests before the court of first instance. Apart from Ukrainian legislation, international transfer pricing practice, OECD Transfer Pricing Guidelines for Multinational Enterprise and Tax Administrations were also analyzed to prove the appropriateness of comparable uncontrolled price method used by the company and compliance of prices in controlled transactions with regular prices and the “arm's-length principle”. In addition, as a result of working together to produce a high quality evidential basis and analyzing terms of contracts, characteristics of goods affecting pricing, the court found unlawful the disputable tax notice-decisions issued by the tax authority.
The engagement was led by Kostiantyn Karpushyn, partner, Tax & Legal, and Larysa Antoshchuk, attorney, head of the Tax Dispute Resolution Practice. Volodymyr Chyzhykov, Kateryna Trubetska, Natalia Musiyenko, Yuriy Oliynyk, and Sofia Baranovska, KPMG Law Ukraine team, were also involved in project.